Employee Referral Program Policy

The Employee Referral Program Policy outlines the company’s procedures for employee referrals. It emphasizes the value of referrals, detailing rewards for successful referrals and conditions for participation. The policy ensures fairness, clarity, and promotes the hiring of quality candidates through employee networks.

This Employee Referral Program Policy template is ready to be tailored to your company’s needs. It should be considered a starting point for setting up your employment policies. This may also be called a Employee Referral Policy.

This employee referral policy should include:

1. Details on referral bonuses, specifying the rewards for successful referrals and any additional incentives for hard-to-fill roles.
2. Eligibility criteria for participation, clarifying who can and cannot participate in the referral program.
3. Conditions for referred candidates, such as the requirement that they haven’t applied within the last year and are hired as permanent employees.

Employee referral program policy template

Policy brief & purpose

Our Employee Referral Program Policy explains important aspects of our employee referral procedures. We place great importance on referrals because we trust our employees know what’s best for our company. We want to make this process as smooth as possible for our employees and those who they refer.

Scope

This Employee Referral Program Policy applies to everyone who refers a candidate to our company.

Policy elements

What is an employee referral bonus?

Our company will give out rewards to every referrer. If you know someone who you think would be a good fit for a position at our company, feel free to refer them. If we end up hiring your referred candidate, you are eligible for [$3000] referral bonus or [a trip to a destination of your choice/ Amazon coupons.] Our employee referral rewards may be higher if we hire your referred candidate in a hard-to-fill role. For example, if we hire your referral for the position of [Data Scientist], you may receive [$6000.]

Additional rules for rewards:

• We guarantee that rewards will be paid out within [a month] of the date we hired a candidate.
• There is no cap on the number of referrals an employee can make. All rewards will be paid accordingly.
• If two or more employees refer the same candidate, only the first referrer will receive their referral rewards.
• Referrers are still eligible for rewards even if a candidate is hired at a later time or gets hired for another position.

Who can participate in our employee referral program?

All employees are eligible to participate in our referral program except for:

• Senior management (CEO, Managing Director.)
• Recruiters and hiring managers for positions for which they’re hiring.

Note that hiring managers can’t refer anyone for a position for which they are directly or indirectly responsible. But, they can refer someone for a position that’s in a different department, office or function. This exception doesn’t apply to executives and senior management.

Vendors, contractors, consultants and former employees are also eligible to refer candidates.

Who can be referred?

We have two conditions for candidates who can qualify you for our rewards. They should:

• Have not applied to our company for at least a year.
• Be hired as permanent full- or part-time employees (not as temporary employees or contractors.)

Our company may use an online form or a platform where employees may refer candidates. You can also reach out directly to our [HR/recruiters/Talent Acquisition Manager] with referrals.

Generally, we encourage you to check our open positions and consider your social networks and external networks as potential resources for referred candidates.

Keep in mind that rewards may be subject to taxation. Please contact HR or our referral program manager for more information.

We may change our referral bonus program over time to add more interesting incentives. We also reserve the right to abolish certain rewards if they prove ineffective or inefficient. We’ll communicate any change clearly and timely. Employees who referred candidates before a reward was abolished will still receive the appropriate reward.

We’d like to remind our employees that we are an equal opportunity employer and do not discriminate against protected characteristics. Our referred candidates may take precedence in the hiring process. We guarantee that all candidates will be given the same consideration and will pass through our established procedures.

Further reading

Frequently asked questions

What is an example of an employee referral policy? An employee referral policy provides guidelines on how employees can refer potential candidates for open positions in the company. It details the rewards for successful referrals, eligibility criteria, and conditions for referred candidates, ensuring a structured and transparent process. Why is an employee referral policy important? Such a policy is crucial as it taps into employees' networks to find quality candidates, reduces hiring costs, and shortens the recruitment cycle. It also motivates employees to participate actively in the company's hiring process. What should an employee referral policy include? The policy should detail referral bonuses, specify eligibility criteria for participation, and set conditions for referred candidates. It should also address any legal or taxation implications related to the rewards. How are referral bonuses determined? Referral bonuses are typically fixed amounts, but they can be higher for hard-to-fill roles. The policy will specify the exact amount or incentive and any additional rules, such as payout timelines. Who is ineligible to participate in the referral program? Senior management, recruiters, and hiring managers for specific positions are typically excluded from participating. However, they can refer candidates for roles in different departments or functions, with certain exceptions.